Followers

Blog Archive

About Me

Thursday, April 29, 2010

Analysis shows increase in online selling for manfacturers

In an effort to keep up with the Top 500 web-only businesses, consumer brand manufacturers are turning to online selling to stay in the more lucrative e-commerce game.

Amazon.com leads the list of the Top 500 web-only merchants with 52.2% of all web sales. The online retail giant increased their sales from $12.1 billion in 2007 to $14 billion in 2008. If you take Amazon.com out of the equation, manufacturers stand to gain the most as one of the fastest-growing groups in Internet Retailer’s Top 500 Guide.

In the past, most manufacturers have been hesitant to create an online store that would sell directly to consumers. One cited reason was that is might upset or weaken their relationships with distributors and traditional retailers. According to industry analysts, larger chain stores such as Wal-Mart Stores, Inc, and Best Buy are able to better negotiate inventory and pricing with manufacturers through purchasing power. Retailers such as J.C. Penny have focused on producing their own private label brands. This presents a larger threat to consumer brand manufacturers that can be leveraged by selling directly to consumers online. Apple Inc. (number 5 on the list) grew their web sales to $39.4 million in 2008, an increase of over 55%. Brand manufacturers such as: American Apparel, Vera Bradley and Jones also increased their revenues through online transactions.

This trend also creates opportunities and advantages for online merchants seeking a simpler and more streamlined approach to fulfillment. “We are continuing to develop tools and technology that is targeted to the online retail industry,” says SBC Fulfillment President, Brian Schoenbaechler. The ecommerce fulfillment company, launched two connectors last year that allow companies using AbleCommerce and Magento e-commerce software to directly tie into their warehousing, packaging, shipping and fulfillment services. “ The future of the retail industry is dependent on e-commerce, and we want to be a part of this ongoing growth.”